Bigger Than a Trade War

Omri Nahmias

Trump and Xi cease fire, but how long will it hold?

Wednesday, December 05, 2018

It was an eventful week in Washington, even though the main events took place on the Houston–Buenos Aires air corridor. At the G-20 summit, President Trump and Chinese president Xi Jinping reached a truce: Starting from January 1, there will be no new tariffs. The sides will begin negotiations for 90 days in attempt to resolve their trade war, which has lasted for months. In addition, China immediately agreed to “purchase a not-yet-agreed-upon but very substantial amount of agricultural, industrial, and other products from the United States to reduce the trade imbalance between the two countries.”

This was an unexpected development. In the weeks leading up to the summit, the rhetoric between the two sides intensified, leading many in Washington to expect a new round of tariffs come January. The fact that Trump and Xi succeeded in bringing the speeding train to a halt proves there was a lot of willingness to reach a compromise.

Since the start of the trade war, the Chinese have been hurting – but so have American farmers. If both sides succeed in finding the formula for a compromise, the two superpowers are expected to continue battling for economic superiority in what has become a zero-sum game.

What we’ve been calling a “trade war” is actually a wider conflict in many areas — technology, intellectual property, cyber security, agriculture, industry — where China and the US are at each other’s throats. We’re talking not just economics but issues at the core of America’s national security interests.

In this respect, the “trade war” is symptomatic of something much larger. Using all of his leverage, President Trump is fighting to preserve America’s place in the world.